UK Treasury announces plans to sell NatWest Group shares

The UK Government has announced that it intends to sell part of its shareholding in NatWest Group plc (formerly the Royal Bank of Scotland Group plc).

The shares will be sold through a trading plan which will run for 12 months, with sales commencing on 12 August 2021 at the earliest and terminating no later than 11 August 2022.

Following two share sales earlier this year, the government has a 54.7% shareholding in NatWest Group. The implementation of a trading plan represents continued progress towards the government’s plan to return this shareholding, acquired as a result of the 2007-2008 financial crisis, to private ownership.

A trading plan involves selling shares in the market through an appointed broker in an orderly way at market prices over the duration of the plan. Shares will only be sold at a price that represents value for money for taxpayers.

There is cap on the total number of shares that could be sold of 15% of the total number of NatWest Group shares being traded in the market over the 12 month duration of the plan.

Based on recent trading in NatWest, that could mean selling two to three million shares a day, which would add up to about 5% of the bank, or £1 billion of shares, by next summer.

A similar process was used to sell almost £14bn of Lloyds Banking Group stock, leading to its full return to private ownership in 2017.

In 2009, the UK Government took a 79% stake in RBS after funnelling in £45.5 billion to save it from collapse. The UK Government began returning the bank to the private sector in 2015, selling £2bn of shares and reducing its stake from 79% to just below 73%. It then sold a further £2.5bn of shares in June 2018, reducing its stake to 62%. This year’s sales brought the government’s holding down to 55%.

The final number of shares sold will depend on, amongst other factors, the share price and market conditions throughout its duration.

The trading plan has been authorised by the Chancellor on the basis of advice from UK Government Investments (UKGI). UKGI and HM Treasury will keep other sale options open, including further directed buybacks and/or accelerated bookbuilds.

The Treasury said that the decision to launch the trading plan does not preclude the government from using other options to execute future transactions that achieve value for money for taxpayers, including during the term of the trading plan.

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